Impact on Economy

India is one of the world’s worst hit countries in the coronavirus pandemic, with reported cases spiking in recent weeks as the country emerged from a strict nationwide lockdown.

Cumulatively, India has reported more than 400,000 cases of infections since January. Though, relative to its population size, the percentage of infected individuals is still low. India also says the number of people who have recovered is higher than those currently affected by the virus. 

The country’s lockdown began in late March and was subsequently extended several times. Stringent restrictions halted most economic activities and caused millions of people, many of them daily wage earners, to lose their jobs and revenue streams.

Investment bank Goldman Sachs last month predicted a massive 45% decline in economy in the three months between April to June. Ratings agency Moody’s reduced India's credit ratings to the lowest investment grade level. 

India’s recovery trajectory is going to be weak as the country is struggling to get past the peak of the pandemic, according to Priyanka Kishore, head of India and Southeast Asia economics at Oxford Economics. She also said India’s fiscal policy response has been “quite meagre” compared to the stringency of the lockdown.

To mitigate the economic fallout, Prime Minister Modi's government had announced a $266 billion package containing both fiscal and monetary measures, said to be worth around 10% of India’s GDP.

But economists have said the package will do little to stimulate growth, as it includes very little planned government spending and benefits of several measures are expected to only be seen in the medium term. 

While the impact on India’s gross domestic product for the current quarter will not be known for a few more months, these charts below paint a snapshot of how economic activities were hampered during the lockdown.